Compensation for cement mill not set in stone, Australia

Published:
15 July 2011

Australian government claims that a Port Kembla cement mill will be eligible for assistance under the carbon tax have been questioned by the factory’s owners.

Adelaide Brighton Ltd’s managing director Mark Chellew said he was surprised to learn the company’s Port Kembla operation was on a list of Illawarra companies eligible for compensation to soften the impact of the scheme.

The list, published in Wednesday’s Mercury, was provided by the office of Climate Change Minister Greg Combet.

Mr Chellew said while some of Adelaide Brighton’s operations would receive 94.5 per cent of carbon pollution permits for free, grinding, which was conducted by around two dozen employees at Port Kembla, would not.

"We understand cement grinding is not included in any compensation package because the Government does not consider it trade-exposed," Mr Chellew said.

"Working with the Government in a positive manner up until this point has not achieved a result whereas BlueScope, which has been working aggressively with the Government, has achieved a result."

A spokesman for Mr Combet said discussions about the issue were ongoing.

In a statement to the ASX, Adelaide Brighton said that before compensation, the carbon tax would lower profits by $5 million during its first 12 months.

Mr Chellew stressed the Port Kembla site was a small component of the company and was not in jeopardy.

Brickworks Ltd, the owners of an Austral Masonry plant in Port Kembla, will also pay the tax, but is not ranked as an emissions-intensive, trade-exposed industry and will not receive compensation."I wish no ill will towards them but we compete head to head with BlueScope in both roofing and walling and they’ll be paying a carbon price of $1.26 per tonne and we’ll be paying $23," said Brickworks managing director Lindsay Partridge.

Brickworks plans to fully recover the cost of the tax with price rises of up to 6 per cent.

The carbon tax has also not threatened Cement Australia’s $180 million plans to build the country’s largest cement grinding mill at Port Kembla.

Chief executive officer Chris Leon said the company was committed to the development despite the Government’s move.

However, Mr Leon is not satisfied with the structure of the carbon tax.

Cement Australia will be required to obtain $63.9 million in permits in the first full year of the scheme’s operation but will be given roughly $58.2 million in assistance.